The cryptocurrency market experienced a sharp decline after the US Securities and Exchange Commission (SEC) filed a lawsuit against the world’s largest crypto exchange Binance and CEO Changpeng “CZ” Zhao. However, contrary to market expectations, there were no massive liquidations or outflows, as Bitcoin‘s price dipped only slightly to $25,800 and Ethereum managed to maintain its price above $1,800. The lawsuit not only affected the crypto market but also impacted stock markets, as several major companies saw a drop in their stock prices.
Interestingly, despite the 5% drop in both Bitcoin and Ethereum prices, options implied volatility (IV) didn’t increase significantly and even fell. Crypto whales had been using these positions to short both the price and volatility in recent weeks, and now appear to be adopting the “buying the dip” strategy once again.
Analyst Credible Crypto believes that the SEC’s lawsuit against Binance helped bring Bitcoin’s price down to its first target, and further price drops are more likely if forced liquidations take place. However, if Bitcoin reclaims the $27.5k level, then it’s well on its way to new all-time highs.
Some traders argue that as Bitcoin’s price reaches its target lows around $25.8k, the downside will be limited at $20k, with whales looking to buy around the $25k mark. In fact, some have reportedly already started buying, as the price hasn’t dipped below $25k.
At the time of reporting, Bitcoin’s price is trading at $25,766, after recovering from a 24-hour low of $25,445. The key support level remains at $24,800, but traders are working to push the price over the 200-WMA. Ethereum’s price, on the other hand, has seen a 3% gain in the last 24 hours, currently trading at $1,814.
It’s important to remember that the crypto market is subject to rapid fluctuations, and the presented opinions may change according to the ever-evolving market conditions. Always conduct thorough market research and consult with professionals before making any investments in cryptocurrencies.
Source: Coingape
